City’s Fraud-Riddled, DEI-Driven Contractor Scandal Leaves Taxpayers Holding the Bag

The Contract and the Company

Demolition work on the Sherwood Shopping Center along Warwick Boulevard was suppose to begin in March 2026. Press What Matters has not seen any activity at the site in the past 5-6 weeks. City records show the contract, valued at approximately $279,830, was awarded to Cephas Next, Inc. (also referred to in some contexts tied to the Cephas family). The project clears the site for the new 51,144-square-foot library, with construction slated to start in May 2026.

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This is not the first time the Cephas name has appeared in Virginia contracting. In October 2015, Morris Cephas Sr. and Chiroya Cephas, along with their company Cephas Industries, were indicted by a federal grand jury in Richmond on 28 counts related to fraud involving federal stimulus funds. The couple allegedly misused around $340,000 of a $500,000 grant from the American Recovery and Reinvestment Act. The money was intended to build an open-loop biomass manufacturing/recycling facility and create jobs in Richmond’s Southside. Instead, prosecutors said it was diverted for personal expenses, including delinquent IRS taxes, with no facility ever built.

The couple later pleaded guilty to filing false documents. They received probation instead of prison time and were ordered to pay restitution (around $108,500–$121,000). Morris Cephas was a former police officer, and Chiroya a former teacher. Their original company operated in construction, demolition, and recycling — the same fields as the current Newport News work.

DEI and Minority Preferences in Play?

Newport News, like many localities, operates under Small, Women & Minority (SWaM) programs and broader DEI (Diversity, Equity, and Inclusion) initiatives designed to boost participation by minority-owned businesses in public contracting. While these policies aim to promote inclusion, critics argue they often lower the bar on qualifications, past performance, and financial responsibility — leading to higher costs, delays, and risks for taxpayers.

Awarding a significant public project to a firm linked to prior federal fraud convictions raises serious questions about vetting processes. Taxpayers are left “holding the bag” when projects go to contractors who may not be the most qualified, especially amid a push for demographic goals over merit.

This case fits a pattern seen nationally and locally, where set-aside programs and DEI mandates have sometimes enabled fraud or subpar work. Other Virginia contractors have faced penalties for misrepresenting small-business or minority status to win set-asides. Public money for essential services like libraries should demand the highest standards — not social engineering experiments.

Citizens Pay the Price

The Sherwood project is taxpayer-funded. Delays, cost overruns, or poor performance directly impact residents through higher taxes or reduced services elsewhere. The old shopping center demolition is just the start of a multi-million-dollar redevelopment meant to drive economic growth and community revitalization. Handing it to contractors with red flags undermines that goal.

Residents deserve transparent procurement that prioritizes competence, integrity, and value for money. When DEI policies embed preferences that sideline better-qualified firms, everyone loses — especially working families footing the bill.

City officials have not publicly detailed the selection rationale for Cephas Next, Inc., or addressed the prior fraud case. Calls for stricter oversight, rigorous background checks on contractors, and a shift back to color-blind, merit-based awarding are growing louder.

Taxpayers should demand accountability. Public projects are not vehicles for social agendas — they are obligations to deliver results efficiently and honestly.